In his government’s first admission yet of Indian involvement in developing a container terminal at the strategically coveted Colombo Port, President Gotabaya Rajapaksa on Wednesday said 49% of the investment will come from the “Adani Group and other stakeholders”.
President Rajapaksa was addressing representatives of the Port’s worker unions, amid their persisting resistance to any foreign involvement in the proposed project to develop the East Container Terminal (ECT). “The ECT will not be sold or leased,” he assured them, adding that the foreign investments would cause no harm to Sri Lanka’s sovereignty or independence, according to a statement issued by the President’s office.
The development comes a week after External Affairs Minister S. Jaishankar’s visit to Colombo, during which he reportedly urged the Sri Lankan side to expedite finalising the deal. While 66% of the transhipment business at the terminal is linked to India, New Delhi’s strategic interest in having a presence at the Port, located along one of the world’s shipping lanes, is no secret.
In May 2019, the predecessor government — led by Maithripala Sirisena and Ranil Wickremesinghe — signed a Memorandum of Cooperation (MoC) with India and Japan for the project. The three countries agreed that the Sri Lanka Ports Authority (SLPA) would retain 100% ownership, while a jointly-owned Terminal Operations Company — 51% stake with Sri Lanka, and 49% with India and Japan — would run the terminal. However, the statement from President Rajapaksa’s office said he “pointed out” to the unions that after his government negotiated with India, it was possible to reach an agreement for SLPA to “retain 51% of the ownership and the control”.
Asked how the new deal would be different from the 2019 MoC — which envisaged neither sale nor a leasing arrangement – SLPA chairman (retired) General M. Daya Ratnayake told The Hindu : “We will not be resorting to any loans. It will all be investment, that is the main difference.” Two Cabinet-appointed committees were tasked with looking into the specifics of the project and negotiating the new agreement, he said.
Colombo-based sources said Japan too was considering the request for investments.
However, Opposition legislator Vijitha Herath of the leftist-nationalist Janatha Vimukthi Peramuna (JVP) — which held a rally on Tuesday protesting Indian involvement in the ECT — said he was not convinced. “Investment is a just a way of covering up the Indian company’s actual role and control here. It does not rule out sale or a lease in future,” he told The Hindu .